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Darcel Ballentine

Barone LLC.

Lorem Ipsum is simply dummy text of the printing and typesetting industry. Lorem Ipsum has been the industry's standard dummy text ever since the 1500s, when an unknown printer took a galley of type and scrambled.

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Leatrice Handler

Acme Co.

Counseling (HUD)

  • Independent counseling with a HUD‑approved agency is required.
  • You’ll review program features, costs, and responsibilities.
  • Expect a certificate upon completion; keep it for your file.
  • Fees vary by agency; fee waivers may be available.
  • Bring ID, budget info, and your questions.

What to Expect: Timeline

  • Estimate: minutes.
  • HUD counseling: 1–2 hours (schedule dependent).
  • Application & disclosures: 1–3 days.
  • Appraisal & underwriting: ~2–4 weeks.
  • Closing & funding: ~3–5 days after clear to close.
  • Timing varies by market and file complexity.

Reverse Mortgage vs. HELOC

Reverse Mortgage

  • No monthly payments required
  • Credit line can grow over time
  • Line cannot be frozen for market changes
  • Repayment due at maturity events
  • Underwriting focuses on age and equity
  • Tax: loan proceeds; consult a tax professional

HELOC

  • Monthly payments required

  • No growth feature on credit line

  • Line may be reduced or frozen

  • Repayment per draw and amortization schedule

  • Underwriting focuses on income and DTI

  • Tax: loan proceeds; consult a tax professional

HECM Basics

  • FHA‑insured program for eligible homeowners age 62+.
  • Principal limit based on age, rates, home value, and FHA limits.
  • Flexible payouts: lump sum, monthly, or line of credit.
  • Mortgage insurance applies; protects borrowers and heirs.
  • Non‑recourse: you or heirs never owe more than the home’s value.
  • Occupancy and upkeep obligations must be met.

What Adult Children Need to Know

  • Parents keep title; the loan is secured by a lien.
  • Non‑recourse: no personal liability beyond the home’s value.
  • At maturity, options are to sell, refinance, or satisfy the debt per program rules.
  • Expect a timeline to decide, with possible extensions.
  • Taxes/insurance must stay current; keep documents in one place.
  • Having a power of attorney or successor contact helps in emergencies.

Refinancing a Reverse Mortgage

  • Reasons: more proceeds, new borrower, lower rate, different features.
  • Typical HECM‑to‑HECM seasoning and net tangible benefit rules apply.
  • Fresh appraisal and underwriting review are required.
  • Closing costs apply; weigh benefits vs. costs.
  • HUD counseling may be required for refis.

How You Can Use It

  • Eliminate an existing mortgage payment.
  • Create flexible monthly cash flow.
  • Fund home repairs or accessibility upgrades.
  • Cover medical or in‑home care expenses.
  • Build a retirement buffer or emergency fund.
  • Purchase a new primary residence (HECM for Purchase).

Qualifications & Eligibility

  • Age 62+ (at least one borrower).
  • Primary residence; live in the home most of the year.
  • Sufficient home equity based on age, value, and rates.
  • Ability to pay taxes, insurance, HOA dues, and maintain the home.
  • Eligible property types (e.g., single‑family, select condos, FHA limits apply).
  • Financial assessment and HUD counseling required.

Reverse Mortgage 101

  • A loan for homeowners 62+ that turns a portion of home equity into cash.
  • You keep ownership and title; the lender has a lien.
  • No required monthly principal or interest payments.
  • Interest and fees accrue; the loan is typically due when you sell, move, or pass away.
  • You must stay current on taxes, insurance, and home upkeep.

Mythbusters: Reverse Mortgage Facts

  • Myth: You lose your home. Fact: You keep title; the lender has a lien only.
  • Myth: You can owe more than the home’s value. Fact: FHA-insured HECMs are non‑recourse.
  • Myth: Payments are taxable. Fact: Proceeds are loan advances; consult a tax pro.
  • Myth: Heirs are stuck with debt. Fact: Heirs can repay 95% of appraised value or the balance, whichever is less.
  • Myth: You can be forced out. Fact: If you meet obligations, you can remain in the home.
  • Myth: Existing mortgages disqualify you. Fact: Proceeds can pay them off at closing.
  • Myth: It’s only for the desperate. Fact: Many retirees use it as a planning tool.

Products

HECM Fixed

Government-insured reverse mortgage with a fixed rate and lump-sum proceeds at closing.

HECM Adjustable (Line of Credit)

Flexible line of credit that can grow over time, with optional monthly payouts.

Jumbo Reverse

For higher-value homes above FHA limits; lender-specific terms and features.

Repayment

  • The loan is typically due when the home is sold, you move out, or the last borrower passes away.
  • No monthly principal or interest payments are required; interest accrues over time.
  • Repayment options usually include selling the home, refinancing, or paying the balance with other funds.
  • Non-recourse protection means you or your heirs never owe more than the home’s value.
  • Staying current on taxes, insurance, and upkeep helps keep the loan in good standing.

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